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EVI Q1 Earnings Decline Y/Y on High Costs, Stock Down 18%
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Shares of EVI Industries, Inc. (EVI - Free Report) have declined 17.8% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares unfavorably with the S&P 500 index, which posted a 1.9% gain over the same period. Over the past month, EVI stock has lost 18.1%, while the broader market, as measured by the S&P 500, has advanced by 3.1%, highlighting a pronounced underperformance for the commercial laundry equipment distributor.
For the first quarter of fiscal 2026, EVI reported earnings per share of 11 cents, which declined from 21 cents in the prior-year quarter.
Revenue rose 16% year over year to $108.3 million from $93.6 million in the prior-year quarter. Gross profit grew 18% to a record $33.9 million, reflecting a gross margin of 31.3%, which also marked a record for the company.
Operating income fell to $3.6 million from $5 million a year ago, and net income dropped 43% to $1.8 million from $3.2 million. Adjusted EBITDA also decreased 11% to $6.8 million compared to $7.6 million in the year-ago period, indicating margin compression amid ongoing investments.
EVI Industries, Inc. Price, Consensus and EPS Surprise
EVI’s gross margin reached a record 31.3% in the quarter, up from 30.8% a year ago. This improvement was primarily attributed to the positive impact of the Continental acquisition (formerly Girbau North America). Excluding Continental, the gross margin would have been about 30.2%, slightly below the prior year, due to product mix in legacy operations.
Adjusted EBITDA margin stood at 6.2% of revenues, down from 8.1% in the comparable period, as the company ramped up modernization and integration initiatives.
Selling, general and administrative (SG&A) expenses rose to $30.3 million from $23.9 million, driven by investments in field service technologies, CRM systems and participation in a major industry exposition. These expenses contributed to the contraction in profitability metrics. Net income as a percentage of revenues fell to 1.7% compared to 3.5% in the prior-year quarter.
Management Commentary
Chairman and CEO Henry M. Nahmad emphasized the company’s long-term vision, stating that current initiatives — including acquisitions, technology upgrades and process improvements — are geared toward building a more resilient and scalable business. He stressed that while near-term margins were impacted, these efforts are foundational to EVI’s strategy of sustainable growth, market share expansion, and operational efficiency.
Management views the current revenue gains and record gross margins as validation of its buy-and-build approach. While profitability dipped, the company believes that strategic investments — particularly in technology and integration — will yield stronger future performance.
Factors Influencing the Headline Numbers
EVI’s strong revenue growth was supported by the integration of newly acquired businesses and stable performance in legacy operations. However, these acquisitions also required significant investments in consolidation and optimization, which pressured earnings. Notably, the company’s participation in the largest North American commercial laundry exposition — held for the first time since August 2022 — contributed to elevated expenses during the quarter.
Additionally, higher SG&A costs and increased interest expense (up to $0.9 million from $0.5 million) further squeezed profitability. The elevated cost base reflects the company’s strategic decision to prioritize long-term platform enhancement over short-term operating leverage.
Guidance
The company reiterated its confidence in sustaining gross margin improvements and pursuing additional acquisitions. Management highlighted strong demand trends and ample financial flexibility, supported by a robust balance sheet and borrowing capacity, to continue investing in innovation and expansion.
Other Developments
During the quarter, EVI declared a special cash dividend of 33 cents per share, totaling $5 million, the largest in its history. This move underscores the company’s financial strength and confidence in its strategic trajectory. EVI also completed four acquisitions since the comparable year-ago quarter, including its largest to date, thereby extending its market leadership in the fragmented commercial laundry space.
Furthermore, EVI continued to scale its proprietary field service platform, which handled approximately 9,000 service appointments in September 2025, a significant increase from just 1,000 a year earlier. Phase one of a new CRM system was also rolled out at Continental, with plans for broader implementation. These technological investments are aimed at improving efficiency, customer responsiveness and sales effectiveness.
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EVI Q1 Earnings Decline Y/Y on High Costs, Stock Down 18%
Shares of EVI Industries, Inc. (EVI - Free Report) have declined 17.8% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares unfavorably with the S&P 500 index, which posted a 1.9% gain over the same period. Over the past month, EVI stock has lost 18.1%, while the broader market, as measured by the S&P 500, has advanced by 3.1%, highlighting a pronounced underperformance for the commercial laundry equipment distributor.
For the first quarter of fiscal 2026, EVI reported earnings per share of 11 cents, which declined from 21 cents in the prior-year quarter.
Revenue rose 16% year over year to $108.3 million from $93.6 million in the prior-year quarter. Gross profit grew 18% to a record $33.9 million, reflecting a gross margin of 31.3%, which also marked a record for the company.
Operating income fell to $3.6 million from $5 million a year ago, and net income dropped 43% to $1.8 million from $3.2 million. Adjusted EBITDA also decreased 11% to $6.8 million compared to $7.6 million in the year-ago period, indicating margin compression amid ongoing investments.
EVI Industries, Inc. Price, Consensus and EPS Surprise
EVI Industries, Inc. price-consensus-eps-surprise-chart | EVI Industries, Inc. Quote
Other Key Business Metrics
EVI’s gross margin reached a record 31.3% in the quarter, up from 30.8% a year ago. This improvement was primarily attributed to the positive impact of the Continental acquisition (formerly Girbau North America). Excluding Continental, the gross margin would have been about 30.2%, slightly below the prior year, due to product mix in legacy operations.
Adjusted EBITDA margin stood at 6.2% of revenues, down from 8.1% in the comparable period, as the company ramped up modernization and integration initiatives.
Selling, general and administrative (SG&A) expenses rose to $30.3 million from $23.9 million, driven by investments in field service technologies, CRM systems and participation in a major industry exposition. These expenses contributed to the contraction in profitability metrics. Net income as a percentage of revenues fell to 1.7% compared to 3.5% in the prior-year quarter.
Management Commentary
Chairman and CEO Henry M. Nahmad emphasized the company’s long-term vision, stating that current initiatives — including acquisitions, technology upgrades and process improvements — are geared toward building a more resilient and scalable business. He stressed that while near-term margins were impacted, these efforts are foundational to EVI’s strategy of sustainable growth, market share expansion, and operational efficiency.
Management views the current revenue gains and record gross margins as validation of its buy-and-build approach. While profitability dipped, the company believes that strategic investments — particularly in technology and integration — will yield stronger future performance.
Factors Influencing the Headline Numbers
EVI’s strong revenue growth was supported by the integration of newly acquired businesses and stable performance in legacy operations. However, these acquisitions also required significant investments in consolidation and optimization, which pressured earnings. Notably, the company’s participation in the largest North American commercial laundry exposition — held for the first time since August 2022 — contributed to elevated expenses during the quarter.
Additionally, higher SG&A costs and increased interest expense (up to $0.9 million from $0.5 million) further squeezed profitability. The elevated cost base reflects the company’s strategic decision to prioritize long-term platform enhancement over short-term operating leverage.
Guidance
The company reiterated its confidence in sustaining gross margin improvements and pursuing additional acquisitions. Management highlighted strong demand trends and ample financial flexibility, supported by a robust balance sheet and borrowing capacity, to continue investing in innovation and expansion.
Other Developments
During the quarter, EVI declared a special cash dividend of 33 cents per share, totaling $5 million, the largest in its history. This move underscores the company’s financial strength and confidence in its strategic trajectory. EVI also completed four acquisitions since the comparable year-ago quarter, including its largest to date, thereby extending its market leadership in the fragmented commercial laundry space.
Furthermore, EVI continued to scale its proprietary field service platform, which handled approximately 9,000 service appointments in September 2025, a significant increase from just 1,000 a year earlier. Phase one of a new CRM system was also rolled out at Continental, with plans for broader implementation. These technological investments are aimed at improving efficiency, customer responsiveness and sales effectiveness.